Karam Inc. has compiled the following data in order to put together its first quarter operating budget for the year: February March 31,000 38,000 January 35,000 Sales (units) Each unit requires three hours of direct labor. Additional information: Karam sells each unit for $95. Company policy is to have 30 percent of next month's sales (in units) in ending finished goods inventory. This policy was met in December. Company policy is to have 40 percent of next month's production needs in ending raw materials inventory. The production needs for April are 95,500. This policy was met in December. It takes three pounds of material to produce each unit, and the cost is $2.75 per pound. April 29,000 A. Prepare a sales budget for January, February and March and for the first quarter in total. Karam Inc. Sales Budget For the Quarter Ended March 31, 20XX Line Item Description January February March Sales in units Unit selling price Budgeted sales Total
Karam Inc. has compiled the following data in order to put together its first quarter operating budget for the year: February March 31,000 38,000 January 35,000 Sales (units) Each unit requires three hours of direct labor. Additional information: Karam sells each unit for $95. Company policy is to have 30 percent of next month's sales (in units) in ending finished goods inventory. This policy was met in December. Company policy is to have 40 percent of next month's production needs in ending raw materials inventory. The production needs for April are 95,500. This policy was met in December. It takes three pounds of material to produce each unit, and the cost is $2.75 per pound. April 29,000 A. Prepare a sales budget for January, February and March and for the first quarter in total. Karam Inc. Sales Budget For the Quarter Ended March 31, 20XX Line Item Description January February March Sales in units Unit selling price Budgeted sales Total
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:B. Prepare a production budget for January, February and March and for the first quarter in total.
Karam Inc.
Production Budget
For the Quarter Ended March 31, 20XX
Line Item Description January February March
Sales in units (given)
Desired ending inventory
Total needs
Less: Beginning inventory
Units to be produced
C. Prepare a direct materials purchases budget for January, February and March and for the first quarter in total.
Karam Inc.
Direct Materials Purchases Budget
For the Quarter Ended March 31, 20XX
Line Item Description
Units to be produced
Direct materials per unit
Production needs
Desired ending inventory
Total needs
Less: Beginning inventory
Direct materials to be purchased
Cost per pound
Total purchase cost
Total
January February March
$
Total
Transcribed Image Text:Karam Inc. has compiled the following data in order to put together its first quarter operating budget for the year:
February
March
31,000
38,000
January
35,000
Sales (units)
Each unit requires three hours of direct labor.
Additional information:
Karam sells each unit for $95.
Company policy is to have 30 percent of next month's sales (in units) in ending finished goods inventory. This policy was met in December.
Company policy is to have 40 percent of next month's production needs in ending raw materials inventory. The production needs for April are 95,500. This policy was met in
December.
It takes three pounds of material to produce each unit, and the cost is $2.75 per pound.
A. Prepare a sales budget for January, February and March and for the first quarter in total.
Karam Inc.
Sales Budget
For the Quarter Ended March 31, 20XX
Line Item Description January February March
Sales in units
Unit selling price
Budgeted sales
April
29,000
Total
8888
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